Misses the Point

BUSINESS WITH PERSONALITY CHELSEA’S BLUES A LEAN, GREEN MACHINE MAGUIRE HEADS THE FIRM GIVING CLASSIC UNITED TO WIN AT CARS A CLEAN FUTURE P24 THE BRIDGE P26 TUESDAY 18 FEBRUARY 2020 ISSUE 3,558 CITYAM.COM FREE A cyclist battles the snow in Wuhan — the EU ‘misses coronavirus’ epicentre the point’ of GLOBAL Leave vote CATHERINE NEILAN @CatNeilan BRITAIN's refusal to align itself with EU regulations is not “some clever tactical TRADE position” but the entire object of Brexit, Boris Johnson’s chief negotiator said last night. In a stark warning that the UK would not capitulate to demands over the so-called level-playing field, which includes rules around competition, the environment FEELS and tax, David Frost stressed that the EU “fails to see the point of what we are doing” in breaking away from the bloc. “We bring to the negotiations not some clever tactical positioning but the fundamentals of what it means to be an independent THE CHILL country,” he said in a lecture CORONAVIRUS EXPECTED TO MAKE GRIM to the Universite Libre de Bruxelles, just a fortnight WORLD TRADE FIGURES WORSE IN 2020 before talks are due to start. “It is central to our vision EDWARD THICKNESSE which the WTO expects to have an impact areas such as container shipping and GDP growth predicted that G20 economies that we must have the ability @edthicknesse across every element of global goods trade. agricultural raw materials, which fell to will grow a collective 2.4 per cent in 2020, a to set laws that suit us – to The WTO said: “Every component of the 94.8 and 90.9 respectively. slower rate than last year, and warned of claim the right that every THE GLOBAL goods trade is facing a goods trade barometer will be influenced The WTO figures capped off a day of the impact of the virus. other non-EU country in the challenging year with already weak growth by the economic impact of Covid-19 and miserable news for the global economy. The firm predicted a “severe” toll on the world has,” he added. set to be compounded by China’s deadly the effectiveness of efforts to treat and Japan revealed that its economy had world economy if infection rates do not fall. Frost noted the Treaty of coronavirus outbreak. contain the disease.” shrunk more than six per cent in the fourth However, the editor of Chinese state- Rome was struck in less than a The World Trade Organization’s (WTO) In total, the volume of global goods quarter, in part due to the impact of a owned paper Global Times — a publication year and warned the UK goods trade indicator fell to a reading of traded in the third quarter of 2019 fell 0.2 domestic tax hike and Typhoon Hagibis, with close ties to the communist leadership would not extend the 95.5 this month, down from 96.6 in per cent on the previous year. The WTO which hit the Rugby World Cup. — last night claimed the economic impact transition period beyond 2020. November. A reading of 100 or above in the said that although the numbers may pick Analysts warned that the coronavirus would be “temporary”. “[Then] we recover our closely-watched report is a sign of up in the fourth quarter, there was no outbreak would further hurt the world’s “Those who badmouth China’s economy political and economic medium-term growth. guarantee of a “sustained recovery”. third-largest economy, with a recession on will get a slap in the face,” Hu Xijin tweeted. independence... why would we The reading does not include the period The decline is largely down to global the cards should headwinds persist. want to postpone it?” covering the outbreak of coronavirus — trade tensions and the associated drops in Meanwhile Moody’s outlook for global £ APPLE WARNS ON VIRUS: P3 £ THE CITY VIEW: P2 FTSE 100 ▲ 7,433.25 +24.12 FTSE 250 ▲ 21,826.34 +32.36 DOW 29,398.08 CLOSED NASDAQ 9,731.18 CLOSED £/$ ▼ 1.301 -0.002 £/€ ▼ 1.201 -0.001 €/$ 1.084 unc. 02 NEWS TUESDAY 18 FEBRUARY 2020 CITYAM.COM PULLING INTO THE LEAD... DONALD TRUMP US President flies into Daytona 500 as Democrats turn fire on each other yet again THE CITY VIEW David Frost refuses to sugar-coat it for the EU RADE deals are like sausages — it’s best not to see them being made. But while any UK-EU deal will certainly be the Tresult of high compromise and low politics, Boris Johnson’s chief negotiator popped his head out of the factory door last night to offer some thoughts on his recipe for success. David Frost, addressing an audience at Universite Libre de Bruxelles, tackled head-on the issue of regulatory alignment and EU demands for a level playing field. He said: “To think that we might accept EU supervision on so-called level playing field issues simply fails to see the point of what we are doing... It isn’t a simple negotiating position which might move under pressure — it is the point of the whole project.” Bordering on the undiplomatic, he went on: “How would you feel if the UK demanded that, to protect ourselves, the EU dynamically STORIED Nascar race the Daytona 500 added another chapter to its history yesterday as President Trump dropped in last minute harmonise with our national laws set in Westminster and the to a raucous reception from the lively crowd. After flying over the crowds in Air Force One, he took The Beast on a ceremonial lap. decisions of our own regulators and courts?” Frost was echoing Meanwhile, Democrats fought over the party’s nomination, with past comments by Mike Bloomberg the latest talking point. another major speech on UK-EU relations given at a different European university in 1988, when Margaret Thatcher told the College of Europe in Bruges: “We have not successfully rolled back the frontiers of the state in Britain, only to see them re- imposed at a European level.” Frost’s speech is both significant and unsurprising. It is significant because trade negotiators on the eve of locking horns do not normally make such UK and EU must rebuild philosophical public interventions. But its content is unsurprising, given that everyone from Mark Carney to former chancellor George Osborne have all now accepted, and stated publicly, that the UK simply cannot outsource its regulations to trust to reach agreement the EU. One of the first people to recognise this was Jonathan Hill three years ago. Having stepped down as the EU’s commissioner ANNA MENIN by the government. “There is a limit to the trust that for financial services in the wake of the referendum result, Hill @annafmenin Under current provisions, the EU regulators and supervisors can build (who voted Remain) told the House of Lords that the UK had no can grant equivalence to countries with each other when the key ques- THE UK and European Union must it deems to have a strict enough tions are decided at a political level,” choice but to diverge from EU rules. He was talking specifically rebuild trust “at a political level” be- regulatory framework, but can also it continued. about the City (as were Carney and Osborne) and it’s on the detail fore they can reach an agreement on unilaterally withdraw this with 30 Financial services have raised of financial market access that so much of the coming the City’s future regulatory relation- days’ notice. concerns that their access to the negotiations will focus. Before he quit as chancellor, Sajid Javid ship with the bloc, according to a Any agreement reached between bloc could be used as a bargaining new report. the UK and EU on equivalence would chip in wider trade negotiations, used an article in this newspaper to expand on this point and Britain is seeking “comprehensive” depend on the pair first establishing limiting their future access to the make the case for a rolling regime of equivalence to ensure or “permanent” equivalence with the a “significant” degree of trust be- bloc’s markets. continued trade in financial services between the UK and EU. It bloc to ensure the City maintains per- cause of this, the report added. Of the 39 different equivalence was a pragmatic approach, given the alternatives, but as the manent access to EU markets, but the “There is a level of trust at the regu- regimes currently in place, most EU has rebuffed this, saying it will latory level… but in the wider politi- do not include access to EU capital markets think tank New Financial makes clear today, it not negotiate “open-ended” or “ongo- cal environment I don’t think there markets, and none cover a country’s would also be inadequate over the long term. New Financial ing” equivalence. is trust,” said New Financial senior entire supervisory and regulatory suggests equivalence could provide “a temporary and politically The report, published today by think analyst Panagiotis Asimakopoulos, framework. tank New Financial, also said that the who co-authored the report. “There is nothing like a comprehen- acceptable bridge in key sectors for both the EU and UK to adjust most likely outcome of the negotia- This trust is crucial, the report said, sive permanent regime” currently in to life after Brexit.” What that life could look like depends on tions is that Britain will be granted a “because this cooperation by defini- existence, said Asimakopoulos. whether we take David Frost at his word. “selective equivalence” covering a few tion will take place outside of exist- “People think that equivalence will key sectors such as stock exchanges ing formal EU channels… where the solve everything and make every- and clearing houses, rather than the UK will no longer have a seat at the thing as it was before,” but this is not Follow us on Twitter @cityam “comprehensive” agreement sought table.” the case, he added.

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